Court rules that Interior Department can lease Gulf tracts

by
Jen DeGregorio, The Times-Picayune

Wednesday July 29, 2009, 4:52 PM

The Interior Department can lease tracts in the Gulf of Mexico and other federal waters for oil and gas development, an appeals court said on Wednesday, clarifying an April ruling that appeared to overrule a Bush-era energy plan for such activity.

The U.S. Court of Appeals for the District of Columbia Circuit said its April 17 ruling applied only to the Chukchi, Beaufort and Bering Seas of Alaska. The clarification follows a lawsuit by environmental groups and Alaska's Native Village tribe over a five-year plan governing the auction of federal drilling leases through 2012.

Saying the plan's "environmental sensitivity rankings are irrational, " Chief Judge David Sentelle agreed in the court'sApril ruling that the plan failed to consider the environmental consequences of drilling off the coast of Alaska.

The court was unclear, however, about whether the ruling threw out the entire plan or affected only offshore Alaska. Some feared that the Interior would postpone an auction scheduled for this summer in New Orleans offering 18 million acres off the coast of Texas.

Interior Secretary Ken Salazar dispelled those worries earlier this month, however, when he scheduled the auction for Aug. 19 at the Royal Sonesta Hotel in the French Quarter. The court's order on Wednesday gave Salazar the thumbs up to proceed with that sale and others outlined in the Bush-era plan, including an auction for tracts in the Mid-Atlantic.

The fate of Chukchi Sea leases auctioned last year remains unknown, but contracts for Gulf of Mexico leases issued under the plan are safe.

"With respect to the Arctic Ocean and Alaska, we will continue to work expeditiously to address the environmental issues identified by the Court in the existing .¥.¥. plan," Salazar said in a statement.

The oil and gas industry as well as members of Louisiana's Congressional delegation hailed the court's ruling.

"This clarified decision will help U.S. offshore drilling move forward as planned, preserving America's energy security and the countless jobs associated with offshore energy development," U.S. Sen. Mary Landrieu, D-La., said in a statement.

Jen DeGregorio can be reached at 504.826.3495 or jdegregorio@timespicayune.com.